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Kojo: Established in the late nineties by then Mayor Anthony Williams to leverage public funds to raise private dollars for youth services, the DC Trust has, at its best, done that. But, at its worst, it has been plagued by scandal. And now it’s heading for dissolution, as the accounts are bare. Here to explain what’s going on is Brenda Donald. She is the Deputy Mayor for Health and Human Services in the District of Columbia. Brenda Donald, thank you for joining us.

Brenda: Thank you, Kojo, for having me.

Kojo: In an ideal scenario, when things are working properly, what’s the role of the DC Trust in relation to the District government and to the citizens of the District?

Brenda: Well the Trust was envisioned as an intermediary organization that would be a partner to the District government, would help to leverage and raise private funds and then support the work of nonprofit organizations who were focused on youth development, afterschool programming, and that sort of thing.

Kojo: What is meant by “raise” and “leverage” funds?

Brenda: Right. Well, I was with the organization DC Agenda, that is no longer in existence, that helped to start the Trust, working with then Mayor Williams. And at that time, if you will recall, the city was under a receivership, and there was not a lot of confidence by corporations or foundations in giving money to the District government. And so the Trust was seen as a safe place, a credible organization that could raise private dollars. And then the city could also contribute funds, so that there was more money that would go to programs that nonprofit organizations could run.

Kojo: Just so I fully understand how that worked, if the city puts money into the Trust, can the city then go to private organizations or private individuals and say “Look, we have committed to this Trust, we know the nonprofits that will be able to help kids under this Trust, so if you’re looking around for some place to put money, if you’re looking to help kids in the District, this is where to put it.” Is that what is meant by “leveraging” funds?

Brenda: Yes, I think that’s a really good way of describing it. But not just the city would be able to raise money, but the Trust itself was expected to be able to knock on some doors and say, “Wow, we’ve got this wonderful organization, we have a partnership with city government, and we think that this is a good place to invest in, to support the work of community based organizations.”

Kojo: Also joining us in studio is Aaron Davis, he’s a reporter for the Washington Post covering DC Politics and government accountability. Aaron, good to see you.

Aaron:Thanks for having me.

Kojo: The promise of the Trust aside, it has been plagued by scandal, most notably perhaps, the former Councilmember Harry Thomas. To what end did he use the Trust, remind us?

Aaron:Well, this is back as he took office in 2007, 2008. He was kind of diverting some of the funds that were supposed to go to a baseball program, and ended up using that pretty much straight for personal gain, purchase of an SUV, of a motorcycle, of travel. I think there was a fancy pair of shoes in there, something. He received a thirty-eight month federal prison sentence for that. I think what the Deputy Mayor described is exactly how this whole thing was supposed to work. The problem is it really has never quite worked that well. Or if it has, it’s been for brief spurts and there’s been so many ways for this to go wrong. The nonprofit itself...think of it like a Rorschach test, everything you think about DC, like with the problems with the Council, the problems with the Mayor, the problems with the murky way things are funded, you can find enough blame here to go around, there wasn’t good oversight a lot of times, there wasn’t a clear direction from the Mayor of how this should be used, it was shifting. And now we’re learning that the audits of this done by outside auditors, and the way that this fund was being used, really wasn’t how we thought.

Kojo: The Thomas case wasn’t the only sign of trouble. There was a Congressional investigation in 2013, was there not? Did that lead to additional oversight?

Aaron:Well that led to a big part of the Trust work being offloaded. So this was all the DC Opportunity Scholarship money that came in for vouchers, and the DC Trust did administer that. And they said it was doing a poor job of managing that money, seeing where it was going; too many students going into one school and money being used to prop up one of these schools. And so they did move the Opportunity Scholarship fund out of that. You could say that part of what we’re seeing now, the end of the Trust, you can trace it to Harry Thomas Jr. and the fact that nobody really from the outside wanted to put money into the Trust after that. They weren’t sure it was really going to be used the way they thought it was going to be, and also the loss of the Opportunity Scholarship money. You could see that there were some underlying problems in the finances, there was a lot less money to go around, there was twenty million dollars flowing through this Trust during that Opportunity Scholarship period.

Kojo: And what does this mean to the nonprofits who are the ones who are in direct contact with the at-risk children who are supposed to be benefitting from this? Joining us in studio is Andria Tobin. She is the Executive Director of Kid Power. She also currently serves on the board of directors for the DC Alliance of Youth Advocates.Thank you for joining us.

Andria:Thank you for having me.

Kojo: Your organization is one of a number that will be affected by this. Tell us, exactly, what Kid Power Incorporated does.

Andria:Kid Power is a nonprofit here in the District. We’ve been serving DC youth for approximately fourteen years. We provide afterschool and summer programming to about four hundred and twenty-five students.

Kojo: What kind of afterschool and summer programming?

Andria:Our focus is on academics, health & wellness, and civic engagement, really focused on leadership. So giving young people the tools that they need to become informed, engaged advocates for change in their own lives and in their communities. So as we know, young people face tremendous obstacles here in the city, and we think it’s not just important for us to address those immediate, but give our young people a sense of agency to help create a stronger District.

Kojo: How will what’s going on affect your organization and what value do you think would be lost if the kind of work you do goes unfunded?

Andria: I think there’s short term, medium term, and long term effects that this will have. I think most nonprofits and current grantees funded by the Trust are most concerned about current grant commitments. So we are one of many grantees still awaiting payment on services already rendered for young people in the District. We have been reassured by the Trust and by city Council that those funds will be paid out. But there’s a lot of concern for the allocation for FY17, which was to go to the Trust. The nonprofit community was getting ready to make a push for more funds, and now we’re worried about protecting what was allocated. So we want to make sure that there’s a really thought out plan to make sure those funds are protected for many nonprofits and youth in the District, one that is collaborative and strategic, and is flexible and innovative in the way that the Trust was designed to be.

Kojo: If you have questions or comments give us a call at 800-433-8850. Have you done business with the DC Trust in the past? Tell us about your experience, 800-433-8850. You can send email to “kojo@wamu.org”. You can send us a tweet at “kojoshow” or go to our website, “kojoshow.org”. Ask a question or make a comment there. Brenda Donald, you are on the Trust board. When did you first have a sense that the bottom was falling out of this thing, that bankruptcy was imminent? Was there any discussion among you and your fellow board members about how to try to stop it, or is letting it dissolve and starting over the better option, as you saw it?

Brenda:A number of things unfolded over the past few months, and I do serve in an Ex Officio capacity on the board. When I came in as Deputy Mayor under Mayor Bowser, I started taking a closer look at the Trust and the city’s partnership with the Trust, and how we manage our oversight and the cost for administering funds. And so we were already looking at restructuring some of that, in terms of some of our program areas. But there were a lot of things that came to light when the former Executive Director resigned. And we then hired an independent accounting firm to come in and do a forensic accounting of the books. A new Interim Director came in and really started looking at operational costs. But I think the most important thing, to go to Andria’s point and to Aaron’s point, is really our focus going forward. First, I want to clarify when people say “the programs funded by the Trust”. Well, the programs are really funded by the city. And the reality is-

Kojo: Through the Trust.

Brenda:Through the Trust. And so the commitment of the Bowser administration is that we will honor all commitments to existing grantees. In fact, we even asked the Trust to administer funding for the summer programs, and that process is underway. We will do that for the rest of the fiscal year sixteen, which goes through September thirtieth. We are working with the Trust to have a small core team of staff that stays on board, so that we can responsibly complete the commitments for this year. Mayor Bowser has in her budget 4.9 million dollars for Trust programs for Out-of-School Time and summer programs, for the first time all put in to the budget at the beginning of the year. And I and the rest of the administration are advocating for those funds to continue. The other thing is that we’ll be working this summer, really over the next couple of months, with stakeholders, providers, and advocates to come up with the best strategy for going forward. And, as Andria mentioned, it will be strategic, it will be collaborative. And I think we will find a better way forward, and certainly the city will do its due diligence in terms of what we want, what we’re investing our money in, in terms of accountability and oversight.

Kojo: Well frankly, despite all the talk about going forward, some of us are concerned about why we’re not looking back, to see exactly what happened here. Colbert King in the Washington Post Op-ed this past weekend raised that issue. Aaron, many hoped or thought that the group had weathered the storm. But now that we learned that the Trust is essentially out of money, what’s your understanding of that happened and who the heck is responsible?

Aaron:Well, I think you do look at how this has been funded. So the expectation was always that some of the money would come from the outside and some of it would come from the city. And really, since Harry Thomas, the city’s had to fund almost all of it. And they’ve never really put the amount of money up front, in any given year, to do so. And so there’s been little bits of money, as the city finds a little extra here or there, there’s been a little bit pushed over to the Trust. And this has happened to the tune of several millions of dollars a year. And so you don’t have a lot of direction of how this money is supposed to be spent. And that’s a question the past administration is going to have to answer for a little bit. I also think that the Council oversight...I’ve gone back and looked at last year’s hearing and some of these issues were raised a year ago in front of the Council. I think Andria can tell you, because she’s been to more of these hearings than I have been, but these are not new issues to anybody looking closely at it. And so there is some fault with the Council. There is some fault with the Administration. There also is...obviously it’s Ed Davies who’s the former Executive Director, who’s now gone, and Earl Hamilton, the former CFO. So Ed resigned in January, was moving on to a different job and the day he’s leaving, the board finds this personal loan on the books to him. And start looking at this, and there were expenses he put for an airline ticket, for travel. Things had been done with the organization credit card. That kind of stuff that was happening, they’d been paying tens of thousands of dollars a month for their lease on-

Kojo: Twenty-six thousand dollars a month?

Aaron:Yeah. And so there were a lot of ways they could’ve been saving money that they weren’t. And so, was the board really taking a critical look? Were they privy to this information? Was the Executive Director more empowered than he should’ve been? There’s a lot of questions still, to be honest.

Kojo: Frankly, Harry Thomas Jr. may have been the canary in the coal mine. Andria, when and how did you learn about the Trust’s plan to essentially declare bankruptcy? Or did you hear the rumblings before?

Andria:I think I speak for a lot of people that we were surprised in the immediacy, but then in general not surprised. These issues have been raised year after year. I can remember sitting with Jim Graham who, year after year, brought up rent, who brought up certain appointees to the board that maybe shouldn’t have been there. These issues have been going on for a long time. But unfortunately, we did find out right away by the Post. And I think the Trust scrambled to get the message out, more thought out, and I think they did a good job of at least doing that. But these issues have been going on for a long time and, like Aaron said, I don’t think you can put the blame on any one thing. But we can look back and see some structural issues. We can look at other cities, other best practices, to find a way that the government can continue to support its young people through an intermediary that, perhaps, doesn’t open itself to some of these issues with being non-transparent and having some undue influence.

Kojo: Got to take a short break. When we come back, we’ll continue this conversation. If you’ve called, stay on the line, If you’d like to, the number is 800-433-8850. Do you think the District should completely rethink the way it administers funding for programs for at-risk kids? 800-433-8850. What kind of model would you look to? You can send us a tweet at “kojoshow” or email at “kojo@wamu.org”. I’m Kojo Nnamdi.

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Kojo: Welcome back. We’re talking about the DC Trust, which provides funds for nonprofits that help at-risk kids in the District. We’re talking with Brenda Donald, Deputy Mayor for Health and Human Services in the District of Columbia; Andria Tobin, who’s the Executive Director of Kid Power Incorporated, she also currently serves on the board of directors of the DC Alliance of Youth Advocates; and Aaron Davis, he’s a reporter for the Washington Post, covering DC politics and government accountability. We have not mentioned the DC Alliance of Youth Advocates, what does that do?

Andria:It’s a member coalition serving over a hundred and fifty nonprofits in the District, working to support best practices and policies for a youth-friendly DC, around the issues of expanded learning, out-of-school time, youth homelessness, and disconnected youth.

Kojo: And Aaron Davis, I was talking earlier about who is going to be held accountable for this. In that regard you have some, what might be, related news.

Aaron:Yeah, we’re going to be break a tiny bit of news for you on the Kojo Show. Ed Davies is no longer gainfully employed, as I understand it, in Chicago. The nonprofit that he went to go work at there, MHA Labs, I had contact with the company yesterday. His bio page was taken down off the-

Kojo: He was the Executive Director of the Trust. He was the Executive Director who used the Trust credit card for personal expenses, and said he, however, repaid those expenses.

Brenda:And Kojo, if I could chime in-

Kojo: Please, Brenda Donald.

Brenda: When we found this out, we immediately requested an investigation by the Inspector General. So there is an investigation underway. We want to make sure that, we’re not the experts in terms of who should be held accountable for anything legally but they are, and they will conduct that investigation.

Kojo: It’s my understanding that just prior, a few days before Aaron’s story ran, the Trust issued requests for proposals for summer funding. Which group, agency, or organization is going to be responsible for overseeing that work, in the short term?

Brenda:Well, as I said earlier, we’ll have a small core team at the Trust that I will be managing that group to administer the summer funds, and to ensure that the completion of the Out-of-School Time grants are done, and the mini-grants and the other ongoing work for this fiscal year.

Kojo: We got a post on our website from Ken who said, “Between the board members from the Mayor’s office, area experts in banking and law and from DC think tanks, should be able to resuscitate a $5 million trust fund, why isn’t this agency in the financial ER getting CPR, when all the best doctors are standing right there next to the platform [sic]?” What’re you trying to put together now?

Brenda:Yeah, I think too little, too late, in terms of the Trust, that structurally their budget was so unbalanced and their inability to raise private dollars and just relying totally on city dollars just made the decision for the board, it was a tough one, but to say we really need to close up shop and look at another way.

Kojo: On to Sarah in Montgomery County, Maryland. Sarah, you’re on the air. Go ahead please.

Sarah:My comment has everything to do with what she just said about an ability to raise private dollars. I’m incredulous that I just heard on the news this morning how many millions of donated dollars these political candidates can raise, yet you can’t get people to donate to help our children, who are our future? Why don’t you just hire one of these people that are raising all this money for these candidates, to raise money for the children? It just boggles my mind that politicians are more important to people’s pocket books than their own children.

Kojo: Well, as far as I know, Brenda Donald has not ever run for office in the District of Columbia-

Brenda:Not my forte.

Kojo: -so she can’t tell you about campaign funds. But Aaron Davis, the caller says “Look, politicians are great at hitting up on people for money for their campaigns. Why can’t they hit up on the same people to help at-risk kids?” The answer is, they probably do.

Aaron:Honestly, I mean this is something I’ll have to pay a lot of close attention to, going forward, because this is the problem you don’t want to have. You don’t want to be in a position where you’re allowing such a fund to be used for political kickbacks for people who do give donors, or people who are friends of the politicians in power. So if all this work is moved inside the Mayor’s office and millions of dollars are being sent out directly by the Mayor’s office, you do have to then put it through that prism and hold all that accountable in that way, as well.

Kojo: Well some criticism has been raised that unfortunately the directors of these programs have been political appointees, rather than people who were put in those positions because of their expertise and financial management or their experience with nonprofits. To which you say what, Andria?

Andria:Well, just speaking for dealing with my own board, every line item is scrutinized that I spend. And so I think our board has to be intentional. Do we need more lawyers? Do we need more consultants? Do we need more educational professionals? So that the board is really meeting the nonprofit’s needs. And unfortunately, if that’s not the case and they’re just appointed without that really intentional process, I think you open up the doors to potential ethical violations.

Kojo: We’ve hosted a lot of conversations about the nonprofit world. We’re a part of it ourselves, here at WAMU. So we know how conscious donors are of questions about overhead and good stewardship practices. As someone who leads a nonprofit, what are your impressions of how the Trust was established and run as a nonprofit?

Andria:I think that how the Trust was set up to be able to leverage public dollars to raise additional private dollars is something that every nonprofit does. We protect the city’s investment as a nonprofit organization by bringing in private dollars. But I think how that’s transpired has led to an unfortunate lack of transparency and possible corruption, which is a real shame. I read in the Post about, and this is something I was unaware of, about travel expenditures and misuse of credit card. And so those monthly statements should be reviewed every month, as far as I’m concerned. We’re a lot smaller, so I field questions like, “Why did we spend a hundred dollars on Survey Monkey?” But I imagine there could’ve been a little more oversight into their finances.

Kojo: Aaron, some think the Trust was set up to fail or allowed to continue to do so under previous administrations. How so and what ultimately do you anticipate will be the way forward on this? We know that in the short term, Brenda Donald’s agency is going to be overseeing this, but what do you see?

Aaron:Well, it’s a good question, and actually Brenda’s the one to ask. She’ll have a lot of power over how that will happen. But probably more of this will get segregated out into different parts of the government. Some of the education money could be put under the Deputy Mayor of Education, some of it may be better spent -- you know there’s a whole package of grants that the Bowser Administration just put out last fall for public safety and at-risk youth, in the wake of the huge homicide spike last year. So who’s the best person to be looking at that money, and who’s the best person to be looking all the afterschool money. And I do think, whatever you do, it should be more continuous and continuity in the funding, because stories of, just for this summer, these programs will have only about a week’s time to figure out, once they get the money, how they can start running the program a week later. And can people pay rent from one year to the next? It’s not clear for a lot of people who are depending on this money from the city.

Kojo: Brenda Donald.

Brenda:I don’t always agree with Aaron but I agree with his assessment here. So this gives us an opportunity to just figure out the best way forward, what makes the most sense, what does the city want in terms of its resources. And to Andria’s earlier point, it’s got to be done with greater accountability and transparency. And we will be doing this with our partners, and we will consider a number of options and then develop a plan to go forward.

Kojo: Brenda Donald is the Deputy Mayor for Health and Human Services in the District of Columbia. Thank you for joining us.

Brenda:Thank you.

Kojo: Aaron Davis is a reporter for the Washington Post, covering DC politics and government accountability. This story is not completely written yet.

Aaron:No, there’s still some more to do. We will be trying to look back and unpack what happened with greater detail. And there’s a series of audits and investigations, and pretty much everybody with investigative authority in DC is looking at this in one way or another, at this point in time. I think you’ll probably have something from the Attorney General, the DC Auditor, the Inspector General. So those are all yet to come. And when we do get a clear picture of how much money was being used on these personal credit cards or for personal expenses, that could drive a lot of the discussion about whether this was just mismanagement or something a bit more sinister.

Kojo: Andria Tobin is the Executive Director of Kid Power Incorporated and serves on the board of directors for the DC Alliance of Youth Advocates.Your work, you think, goes forward.

Andria:Absolutely. We’re confident the city cares about its young people. We know the issues they face, the young people in our city face, are very complicated and complex. And we’re very happy to be part of a collaborative effort to make sure that their holistic needs, academic, social, health, are being met. And we’re confident the city is going to invest in that.